Asian markets closed lower, with Japan's Nikkei down 1.20%; Hong Kong's Hang Seng, 0.42%; and Korea's KOSPI, 1.43%. European markets were all down, with U.S. futures also pointing south.
The busy week of economic data continues today with initial jobless claims at 8:30 a.m. ET. Economists expect jobless claims dropped to 338,000. "As the partial federal government shutdown ended in the third week of October, we anticipate few if any additional claims from non-federal workers and contractors," Citi's Peter D'Antonio wrote clients. "Claims may still be at the mercy of the California backlogs, which have plagued the data since early September – inflating the four-week moving average."
Then we'll get Chicago PMI — the monthly measure of business activity — at 9:45 a.m. Economists estimate the index fell to 55.0 in October from last month's 55.7 print. "We look for the Chicago purchasing managers’ index to remain roughly unchanged in October, in a relatively solid range," Citi's D'Antonio wrote. "However, we are well aware that the Chicago index tends to jump around a lot. This year the swings have been enormous (and seemingly unrelated to actual changes in activity)."
Exxon Mobil and ConocoPhillips will both report earnings this morning. Analysts are expecting EPS to come in at $1.77 and $1.45, respectively. But analysts also say Exxon could post a 15% profit drop from a year ago as the price of oil squeezes margins. AIG and Time Warner will also report before the bell.
Europe saw a round of brutal unemployment stats this morning. Euro zone unemployment hit a record high 12.2% in September, with Spain's rate staying at a dismal 26.6% and Italy's rising to 12.5%. Youth unemployment edged up to 24.1% from 24.0% and inflation was at only 0.7% year over year, missing economist expectations of 1.1%
Facebook beat on Q3 EPS and revenue when it reported earnings yesterday afternoon, launching the stock up 15% in after hours trading. That was until the earnings call, when CFO David Ebersman said the company saw a dip in teenage usage. "This seemed to spook the market and the stock fell back to Earth," wrote our Jay Yarow.
The U.S. budget deficit fell to a 5-year low, according to data released from the Treasury Department yesterday. The September budget surplus was $75.1 billion, higher than the $69 billion expected by economists. The 2013 fiscal-year deficit was $680.3 billion and revenues from tax receipts reached $2.77 trillion, a record high.
Japan's manufacturing industry is growing at the fastest pace in 3 years. The country's purchasing managers' index (PMI) climbed to 54.2 in October, up from September's 52.5 reading. It's a 41-month high. "The data signaled that the latest expansion was largely demand-driven and apparently unimpeded by the Prime Minister’s recent confirmation of a sales tax hike next April," wrote Markit economist Claudia Tillbrooke. "However, whilst new order growth hit a four-year high and production grew at a similarly sharp pace, employment failed to follow suit in October."
Australian monetary policy got a pat on the back after the release of September's housing data. Building approvals were up 14.4%.
Sony Corp has slashed its profit outlook after reporting a net loss this quarter. "With a quarterly net loss of 19.3 billion yen ($197 million), Sony's bad-news Thursday came in stark contrast to an upbeat showing by Japanese peer Panasonic Corp," Reuters reported. "It also stirred doubts about how the best-known Japanese technology company can anchor a turnaround as rivals like Apple Inc and Samsung Electronics Co have gained dominance through heavy investment in new mobile devices."

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